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CIRCULAR No

CIRCULAR No. 17/1999/TT-BTM OF MAY 19, 1999 GUIDING THE GEM TRADING

Pursuant to the Government�s Decree No. 65/CP of October 13, 1995 promulgating the Regulation on management of activities in gem business;

Pursuant to the Government�s Decree No. 57/1998/ND-CP of July 31, 1998 detailing the implementation of the Commercial Law�s provisions on the goods export, import, processing and purchase and/or sale agency activities with foreign countries;

Pursuant to the Government�s Decree No. 11/1999/ND-CP of March 3, 1999 on goods banned from circulation, commercial services banned from provision; goods and commercial services subject to business restrictions or conditional business;

The Ministry of Trade hereby guides and stipulates in detail the gem business activities, as follows:

I. APPLICATION SCOPE

1. Gems specified in this Circular include natural precious stones specified in Article 1 of the Regulation on management of activities in gem business issued together with Decree No.65/CP of October 13, 1995 of the Government:

Group 1: diamond, ruby, sapphire and emerald;

Group 2: other kinds of precious stones

Which are in the forms: raw materials, being processed, fashioned or used in making jewels and fine-art articles.

2. Traders engaged in the sale, purchase, export, import, processing and/or fashioning of gems and the making of gem jewels and fine-art articles must meet all the prescribed conditions and strictly comply with the provisions of this Circular.

Particularly, the trading in gems to be set on gold jewelry and fine-art articles shall comply with the Vietnam State Bank�s regulations guiding the implementation of the Government�s Decree on gold trading activities.

3. Those enterprises established under the Law on Foreign Investment in Vietnam may conduct gem business activities within their investment licenses� scope and shall have to comply with relevant provisions in this Circular.

II. GEM TRADING, PROCESSING AND FASHIONING

A. DOMESTIC GEM TRADING

1. The conditions for domestic gem trading:

1.1. The conditions on business subjects:

They must be traders (with business registration certificates, clearly stating the goods range and business lines and trades which cover the gems items).

1.2. The conditions on material and technical foundations:

a/ Having at least one gem trading shop or center.

b/ Being equipped with measuring devices (scales, calipers,...) inspected and certified by the State management agency(ies) in charge of measurement.

1.3. The conditions on professional skills and qualifications:

They must have professional officials and employees specializing in gems who have been trained or fostered at gemmological schools and courses or have been working in gem business for 3 years or more.

2. The gem trading activities shall be conducted only at the following places:

2.1. The enterprises� head-offices as well as the gem-trading centers and shops of traders having gem business registration certificates.

2.2. Gem markets at precious stone mines, which are managed by local administrations in coordination with the Vietnam Gem and Gold Corporation.

3. Traders engaged in gem business, when purchasing, selling and/or transporting gems, shall have to bill all required invoices and vouchers according to the Ministry of Finance�s current regulations. Particularly, the trading in gems at gem markets specified in Point 2.2 above must be certified by the agency(ies) directly managing such gem markets.

4. Gem-trading centers and shops shall have to post up the valid copies of their gem business registration certificates as well as the categories, volume and selling prices of gems of all kinds. If they trade in artificial gems (including those to be set on jewels and fine-art articles), information on such artificial gems must be clearly posted up to distinguish them from natural gems, and stated in purchase, sale or transport invoices and vouchers.

5. The expertise of gem shall be agreed upon by the purchaser and seller. When necessary, the State management agencies in charge of goods standardization, measurement and quality and the agencies with the function of market inspection may conduct the inspection and expertise of categories, quality and volumes of various kinds of gems circulated on the market according to the provisions of law.

B. GEM PROCESSING AND FASHIONING (including the processing of gem jewels and fine-art articles)

1. The conditions on gem processing and fashioning:

1.1. The conditions on business subjects:

They must be traders (with business registration certificates, clearly stating the goods range and business lines and trades which cover the gem processing and fashioning).

1.2. The conditions on material and technical foundations:

a/ Having gem-processing and-fashioning establishments equipped with facilities, equipment and tools for gem processing and fashioning.

b/ Being equipped with measuring devices (scales, calipers,...) inspected and certified by the State management agency(ies) in charge of measurement.

1.3. The conditions on the professional skills and qualifications:

They must have professional officials and employees specializing in gems who have already been trained and fostered at gemmological schools and courses or have been working in gem business for 3 years or more.

2. Universities, vocational training schools and scientific research institutions that have gem-related training or researching programs and meet all the conditions prescribed in Clause 1 above may conduct the gem processing and fashioning or making gem jewels and fine-art articles for the gem trading enterprises, but shall not be allowed to trade in gems.

3. Traders that undertake the gem processing and/or fashioning or gem jewels and fine-art articles making for foreign traders shall have to comply with regulations on gem export and/or import, as well as regulations on export goods processing in Section III of this Circular.

III. GEM EXPORT AND IMPORT

1. When exporting and/or importing gems, traders shall have to comply with the following regulations:

1.1. They must be enterprises having certificates of gem business registration and export and/or import business enterprise�s code number registration as prescribed.

1.2. If they export gems with a value of 100 (one hundred) million VN dong or more, they must have gem trading contracts with foreign traders and valid goods sale invoices. If they export gems with a value below the level prescribed above, they shall have to produce to the border-gate customs authorities only valid goods sale invoices.

2. Foreign-invested traders may export and/or import gems according to the scope of their investment licenses and their annual gem export and/or import plans already ratified by the Ministry of Trade or provincial/municipal Trade Services (authorized by the Ministry of Trade).

3. The non-commercial gem export and import shall comply with the regulations of the General Department of Customs.

4. Traders that carry gems overseas for participation in trade fairs, exhibitions or for sale (including overseas auctions, sale at traders� overseas shops or consigned for sale at foreign shops) shall have to comply with the following regulations:

4.1. They must be enterprises having certificates of gem business registration and export and/or import business enterprise�s code number registration as prescribed.

4.2. They must have papers invitation to participate in overseas trade fairs or exhibitions, or papers of invitation to participate in overseas auctions, or contracts for consignment of gems for sale at foreign traders� shops, enclosed with valid delivery bills. In cases where they carry gems for sale at traders� overseas shops, they must have overseas investment licenses according to provisions of the Government�s Decree No.22/1999/ND-CP of April 14, 1999.

4.3. They shall have to strictly comply with the regulations on export and import taxes and foreign currency management as they conduct temporary export for re-import of gems in the above-said forms.

5. The business of gem temporary import for re-export shall comply with the "Regulation on business activities by mode of temporary import for re-export" issued together with the Minister of Trade�s Decision No.1311/1998/QD-BTM of October 31, 1998.

6. The undertaking of gem processing and/or fashioning for foreign traders and the ordering of gem processing and/or fashioning overseas shall comply with provisions in Chapter III of the Government�s Decree No.57/1998/ND-CP of July 31, 1998.

7. The expertise of export and import gems is not compulsory and may be agreed upon by the purchaser and seller. When necessary, the customs authorities, the State management agencies in charge of goods standardization, measurement and quality and the agencies with the function of market inspection may conduct the inspection and expertise of categories, quality and volumes of all kinds of export and import gems according to the provisions of law.

IV. HANDLING OF VIOLATIONS AND IMPLEMENTATION PROVISIONS

1. Traders engaged in gem trading, processing, fashioning, export and/or import and organizations licensed to conduct gem processing and fashioning, that violate the provisions of this Circular shall, depending on the seriousness of their violations, be administratively sanctioned or examined for penal liability according to the provisions of law.

2. This Circular takes effect 15 days after its signing and replaces the Ministry of Trade�s Circular No.03/TM-CSTTTN of March 11, 1997 guiding the implementation of the Government�s regulations on gem trading, export, import, processing and fashioning activities.

3. The provincial/municipal Trade Services shall have to regularly inspect the observance of conditions on gem trading, export, import, processing and/or fashioning by traders operating in their respective localities, and promptly handle violations of this Circular according to the provisions of law.

For the Minister of Trade

Vice Minister

LE DANH VINH